I promise you they are making more than that per game. That would be less than a 5% mark up in most cases. You can't run a business for very long with that thin of margins.

Again, I can assure you they are marking these games up more than you think, at least 30%, and probably more like 40%-45%. I used to sell products manufactured in our company plant with 5 competitiors within 50 miles, and we would never sell below a 30% margin. Our target was 40% and we would receive a larger bonus if we were above 40% at the end of the month.

That mark up has to cover the salaries of all of the office staff (any non manual labor position), the building lease payment and any other expense that is not directly related to each machine they produce such as utilities and new equipment. "Cost" typically only counts the cost of parts and labor to produce each machine.

That being said, I don't think you will have much luck with a group buy. Stern probably has a pretty standard discount program for their distributors (buy xx number of machines get xx% discount). If you maximize that discount program and really beat up your distributor you may save an extra 5% to 8% more than a smart individual who shops around a bit on their own. That is a lot of work to put that sale together for such a small discount. Good luck though.

Don't worry, you don't sound like a dick. You just sound like you are very uneducated when it comes to manufacturing. If you can find a company similar in size, volume and product complexity to Stern, who wholesale their products for anywhere near 5% over the cost of parts and labor then please let me know who they are.

I see where you are getting confused here. Notice the term "Net Margins". I referred to their mark up after parts and labor (I tried to make that very clear in my original post). Those are two totally different things. The net margins in this chart are even higher than I would have thought for some of the categories.